My buyer had an inspection & asked the seller to correct several items

including wood rot (patio door frame & window trim -enough for the inspector's screwdriver to go through). Sellers responded they would only fix a few minor items - not the wood rot. Because he was paying full price, had only asked for $2,000 cc my buyer did not want to purchase the house. The LA told me the sellers under no circumstance would do any further repairs than what they agreed to in their response. My buyer was angered by their response and no longer wanted to pursue this house & wrote rejected on their response form & I sent a signed mutual release asking for return of $500 EM. Later that evening the L.A. sent another response saying they would take care of everything & did not mention the mutual release. . I told the agent there was no basis to respond to their last response because my buyer had already rejected their original response. The LA now says the sellers should keep the EM saying the repairs were minor & the sellers tried to negotiate. Who is Right?

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Answers

Charles brought up a very good point. Be sure to let your client know what you are doing for them every step of the way.
I also want to add to my first post that the contrct is over if the times expire or the counter is not accepted. When you rejected their counter either by notification or by letting time elapse the contract was over. It can be re-instated by addendum if the buyer wants to proceed.
Disposition of the earnest money will wither be dealt with at the broker level or, depending on your contract, go to arbitration.

Always,always have a complete paper trail. If the buyer responded asking for 2000.00 towards repairs and the seller didn't agree, then the buyer has a right to his earnest money. If the seller agreed to pay the 2000.00 and agreed to repairs, the buyer cannot just walk. Always everrything on time and in writing.If I am reading this right and the buyer responded to the sellers response then the earnest money is his and the mutual response needs to be signed and settled before the seller can pursue another offer. I hope this helps. It is getting hard out there!

Well I have been there before, but the bottom line is if your buyer is completely turned off to the house now and the sellers' lack of due dillegence to fix and repair, then your buyer is correct to walk away.
In NJ contracts the sale is contingent on a satisfactory inspection and if in fact the seller's just arent responsive to do appropriate repairs to satisfy the buyer, oh well. Its a shame to lose a deal but the buyer should be happy with their purchase and the sellers should be happy to have a buyer who wants to buy their home, its a no brainer.
Hope my opinion helps
Dianne http://www.DianneMitchell.com

Thanks to everyone who answered my question. I had approached my broker on this and he told me my only recourse was Small Claims Court but I decided to fight it out and that is what my buyer wanted me to do. It finally paid off because the listing agent sent me the signed Mutual Release today with my buyer getting his earnest money back.

The final read on this may vary from state to state. Discuss with your broker and/or attorney for best interpretation on release of EM.

Any experienced agent has been through this scenario. I always try to prep my buyers by letting them know that it is possible the seller will reject their entire repair request and that we need to move through the part of the process with as level head as possible and to keep the goal in mind ... getting this house for the right price & terms.

Once out of the contract, you are free to do anything you want, but did you do it on time? If you were within the contingency period you have the right to pull out of it based on the facts that you mentioned.
nevertheless talk to your lawyer. Do you have one?
Muriel Levin
muriellevin@coldwellbanker.com

Sharon,
I would agree with the first couple of responses. Once the sellers sent you their response and it was signed and rejected, you are no longer in contract. When the LA then came back with a different response, it was the seller coming back to you with an offer to your clients. You do not have to respond to this, but as our colleagues previously stated take it to your broker at once. Your clients do deserve their EM no matter what the LA or sellers believe.
Best of luck getting this handled quickly and make sure that your clients are aware of what you are doing on their behalf each step of the way!

I agree with Jed here. First and foremost this matter needs your broker's attention. But according to your side of the story...the mutual release did it. Congrats and move your clients to close. It's just business.

Sharon,
Obviously this needs to go to your broker for the real decision on how you should respond. Mu opinion having heard your side here and from the chronology I can get is you are still in contract and everything that has gone on up till now is negotation and your client has won.
The seller has agreed to take care of everything and you need the seller to release (mutual release) the funds to cancel escrow. So depending on your contract and other contingencies your client needs to let his frustration go relaize that it was a successful move and since he got what he was asking for proceed.
Please let us know what your broker says and what happens.
This actually relates to the post about people getiing insulted or angry over the other sides response.